The waivers in section 1115 of the Social Security Act (1915) are provisions that allow states to test new Medicaid approaches, different from federal requirement statues ("State Waivers List | Medicaid.gov," n.d.). They are state-level tools that can be used to experiment with either existing or new means of delivering and paying for the Children’s Health Insurance Program (CHIP) and Medicaid health care services. Thus, the waivers allow states to operate their programs within specified flexibility boundaries and offer each state the opportunity to define their priorities, with the assistance of Centres for Medicare and Medicaid Services (CMS) (Hinton et al., 2019).
Executive Summary
California started experiencing the benefits of section 1115 waivers in 2005. CMS provided the state the authority, thereof, via the “MediCal Hospital/ Uninsured Care Demonstration,” allowing it to create a Safety Net Care Pool (SNCP) with the aim of expanding healthcare coverage to uninsured members of certain counties and offer federal matching fund for uncompensated care to those belonging to specified healthcare programs. The parameters set were then renewed in 2010 (1 st November) and rebranded as the “California Bridge to Reform.” The renewed provisions incorporated a Low Income Health Program (LIHP), seeking to provide coverage to low-income earning adults until 13 th of December 2012 when they are qualified for new coverage options provided by the Affordable Care Act. Additionally, the reforms made also expanded the Safety Net Care Pool (SNCP), depicting continued reinforcement of uncompensated care and incentivizing the transformation of the delivery system via Delivery System Reform Incentive Payments (DSRIP). Moreover, the majority of the Medi-Cal managed programs in California are part of the “Bridge to Reform demonstration” and have been expanded to incorporate seniors and persons with disability as a means of expanding managed care to more counties ("California Bridge to Reform Section 1115 Demonstration Fact Sheet", 2015).
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Therefore, this paper will justify the use of the said waiver in California and suggest three policy alternatives that can be used to improve the waiver program for the state. Lastly, the paper will offer recommendations for the best practice of utilizing the waiver in the state to maximize its benefits.
Problem Statement
The approved 2010 waiver supported four main initiatives which define the issues that justify California’s waiver use. The first objective was to facilitate the betterment of healthcare among adults between the ages of 19 and 64, whose incomes were up to 200% of the federal level of poverty through LIHP. Secondly, California sought to use the waiver to improve the coordination of care through the mandatory enrolment of persons with disabilities and seniors to care programs managed by Medi-Cal. Additionally, the state needed to incorporate pilot coordinated care systems through California Children’s Services (CCS) and to support public health hospitals in enhancing care quality through the DSRIP payment incentives that facilitate innovation, urgent care improvement and re-creation of the delivery system ("Section 1115 “Bridge to Reform” Waiver Summary", 2014).
Moreover, the reforms that were made to create the “Bridge to Reform Waiver” further detailed the issues that California was facing. The state needed to use the waiver to strengthen its state health care safety net and maximize the opportunity to provide insurance to most of its state members. Also, the state was looking to maximize the financial resources used to address uncompensated care and optimize the chance of expanding government financial participation in the state’s health sector. Also critical to California was the promotion of proper long-term use of both local and state healthcare funds, improving care quality and outcomes as well as advocating for community and home-based care ("Section 1115 “Bridge to Reform” Waiver Summary," 2014). Generally, the justification of California’s use of the Medicaid Demonstration Waiver 1115 program lies in the state’s need to offer its inhabitants quality and wholesome care services that facilitate the betterment of their well-being regardless of age, social status or physical disability ("California Bridge to Reform Section 1115 Demonstration Fact Sheet", 2015).
Policy Alternatives
Considering the periodical change in administration within the US, policy changes on the provisions that section 1115 waivers can accommodate are expected to change. Evidence of the same is depicted by the changes that the CMS made in 2017, under the Trump administration, to drop the objective of increasing coverage (Hinton et al., 2019). Hence, California must retain its adaptability to such reforms to maximize its exploitation of the benefits that can be realized by using the section 115 waivers.
The first policy alternative that can be used to enhance the waiver program in California is consideration of the revised criteria for approving waivers. The state must tailor any new waiver suggestions in a manner that fosters their alignment with the revised approval criteria whose focus lies in the realization of positive health outcomes, facilitation of both program efficiency and sustainability and coordination of strategies to promote independence and upscaling. Additionally, it seeks to facilitate the introduction of incentives that encourage responsible decision making among program beneficiaries, reform of payment and delivery systems and aligning with commercially available health products (Hinton et al., 2019).
Secondly, to better its waiver program, California should tailor the amends that it seeks to make in a manner that facilitates the exploitation of the previously restricted parameters of applicability. Apart from using waivers to address the opioid epidemic and other behavioral health initiatives, California can now use waivers to pay for the treatment of substance use disorders (SUDs). Additionally, with the aim of maximally exploiting the new waiver approval parameters, California should consider applying for a waiver that facilitates exclusion from payment in mental disorder institutions in cases where the patients are either children battling severe emotional disturbance (SED) or adults suffering from serious mental illness (SMI). These changes will be supported by the new CMS policy which reverses the previous requirements restricting Medicaid payments to elderly individuals with mental health diagnosis in institutions for mental disorders (IMD) (Hinton et al., 2019).
Lastly, California can better its waiver program by incorporating waiver provisions that enhance social health. Funds issued by Medicaid cannot be used to pay for non-medical health interventions like social health determinants. Regardless, if a waiver, to this effect, is tailored like the North Carolina Section 1115 waiver (“Healthy Opportunity Pilots”), which is characterized by the delivery of evidence-based non-medical services addressing health linked social needs, it can be approved. Adaption of such a policy would improve California’s waiver program by increasing its capability to facilitate better care services and enhance the well-being of California residents (Hinton et al., 2019).
Recommendations for Best Practice use of Medicaid Demonstration Waiver 115
The first recommendation for the best practice of utilization of the Medicaid Demonstration Waiver 115 is abiding by the requirement for community engagement. This will fulfil the newly approved CMS policy (January 2018) that seeks to help states enhance the health and well-being of Medicaid beneficiaries through their engagement in community activities. Hence, by implementing the said guideline, California will be able to demonstrate that it has the authority for incentive testing that makes work or community engagement participation a necessity for Medicaid eligibility. Moreover, emphasis on community engagement would lead to the betterment of California’s population as a result of enhanced social health and well-being among individuals in the state, leading to the realization of the goal to better the health of the state inhabitants ("1115 Community Engagement Initiative | Medicaid.gov", n.d.).
Also, to fully maximize the utilization of the said waiver, California must recognize that other waivers can enhance the state’s flexibility to design and operate their Medicaid programs and health insurance markets. Such waivers include the Section 1115 Research and Demonstration Projects waiver that can be applied to allow California to maneuver specific Medicaid law provisions for policy testing and promotion of the Medicaid program objectives. On the other hand, the provisions of the Section 1915(b) Waiver can allow the state to enroll to care delivery systems that are managed or reduce their provider choices, assuming the implications of the same do not substantially restrict access to necessary and good quality medical services ("Understanding Medicaid Section 1115 Waivers: A Primer for State Legislators", n.d.).
Conclusion
California’s need to use the Medicaid Demonstration Waiver 1115 Program is justified because the state has a variety of issues in its healthcare sector that require specified attention, that cannot be achieved through the application of federal health care policies. The waiver program allows California to tailor-make policies that govern its health department, to better the well-being and health of its inhabitants. However, the state can implement policy alternatives that enhance the waiver program including accounting for the new waiver approval criteria when creating new policies, exploiting new provisions to expand the scope of people covered by the program and incorporation of systems that enhance social health. To maximize the utilization of the waiver program, California should implement the community engagement policy and use the provisions of other complimentary waivers to customize health policies within the state.
References
1115 Community Engagement Initiative | Medicaid.gov. Retrieved from https://www.medicaid.gov/medicaid/section-1115-demo/community-engagement/index.html
California Bridge to Reform Section 1115 Demonstration Fact Sheet. (2015). Retrieved from https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/ca/ca-bridge-to-health-reform-fs.pdf
Hinton, E., Musumeci, M., Rudowitz, R., Antonisse, L., & Hall, C. (2019). Section 1115 Medicaid Demonstration Waivers: The Current Landscape of Approved and Pending Waivers. Retrieved from https://www.kff.org/medicaid/issue-brief/section-1115-medicaid-demonstration-waivers-the-current-landscape-of-approved-and-pending-waivers/
Section 1115 “Bridge to Reform” Waiver Summary. (2014). Retrieved from https://www.dhcs.ca.gov/provgovpart/Documents/BTR-1115-Waiver-Summary.pdf
State Waivers List | Medicaid.gov. Retrieved from https://www.medicaid.gov/medicaid/section-1115-demo/demonstration-and-waiver-list/index.html
Understanding Medicaid Section 1115 Waivers: A Primer for State Legislators. Retrieved from http://www.ncsl.org/Portals/1/Documents/Health/Medicaid_Waivers_State_31797.pdf
